I've been reading about and advocating the Trillion $ Coin option as a means of avoiding the US Debt Ceiling impasse on US Blogs for some time now, but have always sought to leave the lead role in writing diaries on the topic to legal or economic experts. And just when I finally decide to weigh in in a more substantial way Krugman decides to write more or less exactly what I wanted to write:Barbarous Relics - NYTimes.com

There will, of course, be howls from the usual suspects if that's how it goes [and the President decides to mint a Trillion $ coin]. Some of these will be howls of frustration because their hostage-taking plan was frustrated. But some will reflect sincere horror over a policy turn that their cosmology says must be utterly disastrous.

Ed Kilgore says, in a somewhat different way, much the same thing I and people like Joe Weisenthal have been saying: what we're looking at here is a collision of worldviews, one might even say of epistemology.

For many people on the right, value is something handed down from on high. It should be measured in terms of eternal standards, mainly gold; I have, for example, often seen people claiming that stocks are actually down, not up, over the past couple of generations because the Dow hasn't kept up with the gold price, never mind what it buys in terms of the goods and services people actually consume.

And given that the laws of value are basically divine, not human, any human meddling in the process is not just foolish but immoral. Printing money that isn't tied to gold is a kind of theft, not to mention blasphemy.

For people like me, on the other hand, the economy is a social system, created by and for people. Money is a social contrivance and convenience that makes this social system work better -- and should be adjusted, both in quantity and in characteristics, whenever there is compelling evidence that this would lead to better outcomes. It often makes sense to put constraints on our actions, e.g. by pegging to another currency or granting the central bank a high degree of independence, but these are things done for operational convenience or to improve policy credibility, not moral commitments -- and they are always up for reconsideration when circumstances change.

Now, the money morality types try to have it both ways; they want us to believe that monetary blasphemy will produce disastrous results in practical terms too. But events have proved them wrong.

And I do find myself thinking a lot about Keynes's description of the gold standard as a "barbarous relic"; it applies perfectly to this discussion. The money morality people are basically adopting a pre-Enlightenment attitude toward monetary and fiscal policy -- and why not? After all, they hate the Enlightenment on all fronts.

If you argue long enough about economics, you are bound to run into the stagflation argument. The stagflation argument claims that the big state and stimulus caused high inflation, high unemployment, and poor growth during the seventies. Usually this argument is not fully argued by those who believe in it-it is merely asserted, and the rest of us are expected to accept that it is simply the case that the seventies happened that way. Today I'd like to endeavour to illustrate what actually happened in the seventies, what the real causes of stagflation were, and what sort of lessons might be pulled from it.

I've never been able to understand why anyone would regard a Bitcoin as having any value, since it is evidence of past (useless) work and energy expenditure with no value other than the creation of a Bitcoin.

Mind you, it is generally accepted that a Bitcoin is made valuable purely by its acceptability to Bitcoin participants as currency. ie it is completely 'faith-based'.

Do Not Throw Stones At This Notice comes to mind in terms of pointless circularity.

In respect of faith-based value - rather than value which derives from use value over time - a Bitcoin as a value token is not dissimilar to gold, of course, but at least gold has amenity value, being nice to look at for a few million years, and possessing some specialised uses.

There's an interesting fork of Bitcoin as well - Freicoin - which introduces Gesell's concept of 'money that rusts' (demurrage) in order to discourage hoarding and encourage spending.

Bitcoin's P2P architecture on the other hand? Now that is valuable: and I haven't even mentioned anonymity and Big Government.

For me, the challenge is to create a unit of account, platform, framework/protocol and generally acceptable instruments (currency) which combine credit, utility and trust.

I think that to do so is both completely necessary and achievable, and moreover represents what is now an implementable Adjacent Possible.

1823 - birth of Alfred Wallace, British naturalist and biologist, who independently thought of the theory of evolution and was co-author with Charles Darwin on the subject's first scientific paper (d. 1913 )